THE EFFECTS OF US IMPORT TARIFFS ON STEEL AND ALUMINUM IMPORTS FROM MEXICO
THE EFFECTS OF US IMPORT TARIFFS ON STEEL AND ALUMINUM IMPORTS FROM MEXICO

Summary/Abstract: This research aims to analyze the effect that the United States tariff policy has had on its imports of steel and aluminum from Mexico. We attempt to ascertain how the United States’ protective trade policy, followed since 2017, influences trade volumes, import prices, and the possible diversion of trade to the rest of the world (ROW). It is suggested that this policy generates an adverse effect on US imports of these metals from Mexico. To this end, mathematical and statistical methods are used to model the effect of tariffs, ex-ante and ex-post, after implementing this trade policy, on exports of aluminum and steel from Mexico to the United States, versus US imports of these metals from the ROW. The results show that the protectionist tariff policy had a structural effect on US imports; likewise, the tariff shock implemented by the United States in June 2018 adversely affected its imports of these goods, both in terms of volume and value. This suggests that bilateral trade may be affected, but the effect is differentiated. The United States may be achieving its objective of protecting its domestic industry or it may impact upwards on the domestic prices of these metals, which could influence the prices paid by the final consumer. For Mexico, trade may be diverted or its export capacity reduced, adversely affecting its trade balance of these metals.

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